Turbulent SA mining industry challenging for contractors
Local hospitality services and facilities management company Tsebo Outsourcing Group has been affected by the recent platinum sector strike, which started in January this year, Tsebo CEO Clive Smith tells Mining Weekly.
“Strikes, by their very nature, have a negative impact on the revenues and profits of the mining company, as well as on the contractors doing business with the mine. Nevertheless, the latest platinum strike has not done irreparable damage to Tsebo’s business, since platinum is a small part of our entire business portfolio,” he notes.
Smith adds that contractors operating in the mining industry face several challenges, including the impact of global slumps on commodity demands.
“This has a domino effect, as the shutting down of mines is followed by retrenchments, which will affect contractors in the mining industry and community members living around those mines. “In worst-case scenarios, some mining operations will have to liquidate, which will impact negatively on contractors doing business with those mining houses.”
Smith notes that the South African mining industry is currently in a state of turbulence, adding, however, that this will pass when all the relevant stakeholders “find common ground to move forward with a common goal”.
He adds that this turbulence impacts on mining contractors, as it creates an environment of temporary uncertainty, particularly concern-ing future investment. “Therefore, the current state of mining in South Africa makes it difficult for service providers to commit to mining companies.
“Tsebo has always supported its clients and staff during trying times and it continues to support its clients on the platinum belt who are affected by the current strike. “We hope that a speedy resolution will be reached shortly,” Smith concludes.
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